TNCs Flashcards
what is a TNC?
organisation that operates in more than one country
how do TNCs connect countries?
spatial organisation
create a global supply chain
what is the spatial organisation of a TNC?
HQs in HICs - well connected, skilled workers
research and development in HICs -skilled workers
factories in LICs - cheaper, labor and fewer environmental laws
how do TNCs make links between countries?
mergers - when two companies become one
acquisitions - when one company buy another (usually smaller)
subcontractors - use other countries to manufacture goods without owning
FDI - investing in foreign countries
how and why do TNCs expand?
allows them to gain control
vertical integration - company takes over all of its supply chain
horizontal integration - when a company merges with another at same stage of production
Outline Apple as a TNC
producer and retailer of technology
HQ and research in California
overseas HQ in Cork
manufacturing in Shenzen, China
positive impacts of Apple in Cork
+ employ 5500 in Cork, positive multiolier effect
+ attracted skilled workers to Cork
+ attract other high tech firms, more economic growth
negative impacts of Apple in Cork
- many workers foreign
accused of not providing suitable jobs for locals
positive impacts of Apple in China
+ 400,000 employed in Foxconn City = positive multiplier effect
+ jobs above minimum wage = better quality of life (growth)
+ investment in China, allows development
negative impacts of Apple in China
- poor working conditions - 60 hours for $100 a week
- suicides - 14 in 2010
- child labour - maintains low costs, unethical
- environmental issues - not recyclable products and non renewable resources
+ but aims to be carbon neutral by 2030
how do TNCs promote growth?
employ people globally
- 400,000 workers in Foxconn city
- 5500 in Cork
= postive multiplier effect, jobs so pay taxes and boost economy
Cork has attracted highly skilled workers
more high tech firms in area
promotes further economic growth
how do TNCs promote stability?
promote globalisation
more interconnected = less chance of conflict
increases international trade
depend on each other for resources
how do TNCs promote inequalities and injustice?
poor pay and working conditions
- 14 suicides in Foxconn city in 2010
- $100 a month for 60 hours a week
positive impacts of TNCs overall
on hosts:
employment = positive multiplier effect
(eg cork and Foxconn city)
increase trade - increased stability and economic growth
transfer of technology
on origin:
overseas investment adds to income for nation
creation of good jobs in research and development
negative impacts of TNCs overall
on host:
environmental damage - exploit natural resources and create pollution/waste
(eg apple products not recyclable and make waste)
exploitation of workers
($100 a month for 60hrs a week)
profits generated not equally distributed = inequalities
spread = loss of culture
- spread western cultures
on origin:
loss of jobs in manufacturing sections as thy move overseas where cheaper
= unemployment
